Not many people are aware of the fact that it is the Secretary of the U.S. Treasury that has the sole authority to establish the exchange rates for all foreign currencies here in the U.S. as well as the rates reported by all agencies of the government. Although Treasury officials mostly let the world financial markets determine the dollar's relative strength and day-to-day value, the feds can’t really steer foreign currency trends at all. The Treasury does oversee the fluctuations in the value of the dollar, but its main goal is to implement policies that ensure stable growth, so that the U.S. economy continues to be the best place in the world to invest capital and the U.S. dollar remains the preeminent currency in the world.
This means the Treasury’s primary purpose is to ensure that foreign currency reports prepared by all federal agencies must be consistent with regularly published foreign currency reports as to the amounts stated in foreign currency units and all U.S. dollar equivalents. The ruling covers all foreign currencies in which the U.S. government has any type of interest in, including receipts and disbursements, accrued revenues and expenditures, authorizations, obligations, receivables and payables, refunds, and other reverse transaction items.
Exceptions to the rule are collections and refunds at specified rates set by international agreements, conversions of one foreign currency into another, foreign currencies sold for dollars, and any other types of transactions that affect U.S. dollar appropriations. The Treasury will also issue new amendments as needed to reflect the establishment of new foreign currencies. By ensuring uniform exchange rates, the Treasury levels the playing field and makes sure that all U.S. government agencies use the same rates to convert foreign currency balances into U.S. dollar equivalents.
